Now that Hewlett-Packard has closed its $2.35 billion 3PAR acquisition, HP executives are looking for 3PAR’s InServ storage systems to fill three spots in its product lineup.
HP’s GM of enterprise storage, servers and networking David Donatelli said Tuesday during HP analyst day that 3PAR is a technology leader in the storage space and a key to his plans to revive HP’s storage business. Pointing to HP’s 11% market share in external storage, Donatelli said “storage is an area we really want to improve on. We want to go after the 89 percent of the market we don’t have.”
And HP is counting on its shiny new toy to chase that market share.
“3PAR has the new storage software architecture on the market, and it has all the features customers want,” Donatelli said, mentioning thin provisioning and sub-volume automated tiering among those features.
Donatelli said 3PAR’s products will complement HP’s current storage lineup without replacing any platform. The vendor plans to continue its P4000 (Left-Hand iSCSI), P6500 and P8500 (EVA) and P9500 (XP) families, as well as its scale-out NAS (Ibrix). But he said EVA would become a lower mid-tier platform with 3PAR taking over the high end of the midrange, open systems enterprise, and cloud storage segments.
“With 3PAR, we can cover multiple markets with a single product,” Donatelli said. “Everybody has unique products by market segment, even we do. But for the service provider and cloud space we had nothing. 3Par covers mid-tier, the high end and the cloud. You can start it small [with two controllers] and grow it [to eight controllers]. It supports three distinct markets.”
HP launched its P9500 enterprise system Monday based on the same architecture as Hitachi Data Systems’ Virtual Storage Platfrom (VSP). Donatelli said that product “is great for our installed base and mainframes.”
Hewlett-Packard is launching is version of Hitachi Data System’s new VSP system today, which should end speculation that HP will sever its OEM deal with Hitachi’s parent company for its enterprise storage platform.
HP is dropping the XP brand for its enterprise system, instead calling it the HP StorageWorks P9500 Disk Array. That’s part of HP’s new naming structure, where the MSA became the StorageWorks P2000, LeftHand iSCSI SANs became P4000 and the EVA turned into the P6400 and P8400. But the P9500 is a continuation of HP’s OEM deal with Hitachi Japan (not HDS).
“It’s still XP, but it’s called the P9500,” HP StorageWorks VP Tom Joyce said.
HP’s acquisition of 3PAR for $2.35 billion raised the question of whether it would end its Hitachi OEM deal. 3PAR positions its InServ T-Class arrays as a direct competitor to the XP line, as well as enterprise systems from HDS, EMC and IBM. But 3PAR lacks mainframe connectivity found in the XP/P9500, USP/VSP, EMC Symmetrix, and IBM DS8000, and that’s reason enough for HP to maintain its Hitachi OEM deal.
“It’s premature for us to talk publicly about 3PAR because we haven’t closed it [the deal closed today], and we don’t want to get ahead of ourselves,” Joyce said. “But a lot of customers need mainframe capability and this [P9500] has it. A lot of customers have made an investment in XP and we want to keep those customers happy.”
What else about the P9500can keep customers happy? Joyce pointed to its use of Intel architecture as a key to HP’s converged infrastructure strategy and the automatic sub-LUN tiering capability built into the new architecture. HP, which sells its own management software with the XP/P9500, also has new metered licensing software for the P9500.
HP will eventually have to answer questions about where it will position its 3PAR products. When HP first bid for 3PAR, HP storage chief Dave Donatelli said it could fit in the midrange. HP’s midrange EVA has been losing market share and people in the industry say it lacks the features of its competitors, most notably the EMC Clariion. Still, the EVA has a large installed base and HP wants to keep those customers happy, too.
David Floyer, CTO of analyst firm Wikibon, said 3PAR’s arrays are not sufficient to replace HP’s enterprise platform.
“3PAR is not tier one,” he said. “It makes everything work well, but it’s not the box you want if you have a huge database that is temperamental and you have to throw everything at it to work well.”
Does Larry Ellison want NetApp, or does he only want the large chunk of customers who use NetApp systems to store Oracle databases?
The Oracle CEO appeared envious of NetApp when addressing financial analysts Thursday, guessing that 60% of NetApp’s business comes from storing Oracle databases. “We’d love to have that 60 percent,” Ellison added.
Oracle gobbled up Sun earlier this year, and Ellison and Oracle CFO Jeff Epstein said Thursday that Oracle is still shopping. Ellison said a chip company is on his shopping list. A lot of people in the IT industry think he would like to add storage as well although Oracle expanded its storage line at Oracle OpenWorld this week with its Exalogic cloud product and an enhanced ZFS Storage Appliance platform.
In any case, Ellison’s comments will certainly increase speculation that NetApp is an acquisition target, and is likely to send it stock price soaring as rumors of IBM and Dell interest this week did for Brocade’s shares.
Storage blogger and Storage Magazine/SearchStorage.com contributor Stephen Foskett this week made a case for Oracle buying either Hewlett-Packard or NetApp, and concluded that NetApp is the more likely target:
“An Oracle acquisition of NetApp makes so much sense, I’m surprised it hasn’t happened already,” Foskett wrote on his Pack Rat site. “Combine very little product overlap, a ‘doable’ price, and a poke-in-the-eye for IBM and you have a winner for Larry Ellison. No other available company offers the solid enterprise storage portfolio and sales of NetApp, and few other companies could make the purchase. The recent NetApp/Oracle ZFS settlement makes it look like something could already be in the works. Unless Oracle really is content to stand pat with Sun’s ZFS storage systems, I expect a NetApp deal within a year.”
Oracle’s big storage product launch at Oracle OpenWorld today wasn’t much of a surprise. It rolled out the next generation of its ZFS Storage Appliance line, bumping up the speeds and feeds and adding tight integration with Oracle software. That’s what Oracle CEO Larry Ellison said the vendor would do back in January, shortly after Oracle acquired Sun. Ellison also said the new unified storage appliances would be announced at Oracle OpenWorld during Oracle’s earnings call last week.
The ZFS Storage Appliance is Oracle’s name for what Sun called the Sun Storage 7000 series. Today, Oracle replaced the Sun Storage 7110, 7310, and 7410 with the Sun ZFS Storage 7120, 7320 and 7420, and added the 7720 for bulk storage and capacity.
The 7120 is a 2U system for SMBs and departments, and scales to 120 TB with two shelves of 2 TB SAS drives. The 7320 is a 1U configuration that can be clustered for high availability, and scales to 192 TB with four disk shelves. The 7420 3U system scales to 1.15 PB with 24 disk shelves and the 7720 is a 42U device that scales to 720 TB in one chassis. All the systems support solid state drives (SSDs), and they range from four Intel processing cores for the 7120 to 32 cores for the 7420 and 7720.
The appliances also include Oracle RMAN backup, Oracle Database Cloning, and Oracle Fusion Middleware for backup and recovery of Oracle apps, and are optimized for Oracle Applications, Oracle Database, Oracle Solaris, Oracle Linux and Oracle VM.
Xiotech chief marketing officer Brian Reagan said the vendor had no timetable for embedding primary dedupe into its storage systems. “We’re looking at incorporating Albireo into our next-generation products,” he said, adding that Xiotech does not plan to use it in current shipping products. “It’s an opportunity to enhance products on our roadmap now.”
However, the press release issued by the companies said Xiotech will use dedupe with its Intelligent Storage Element (ISE) storage blades, suggesting that it will be in an ISE upgrade. Xiotech has been pushing its storage’s performance with virtual desktop infrastructures (VDI), and the release said “Xiotech’s leading cost per virtual desktop will be taken to the next level when combined with Albireo’s enormously powerful deduplication of virtual desktops, greatly reducing storage requirements.”
The release also noted that Albireo sits outside the data path, has no impact on data reads, and scales to petabytes.
Reagan said Permabit and Xiotech are headed in the same strategic direction with data reduction, and the move to incorporate reduction technology is inevitable.
“We’ve seen the rise of deduplication and compression in backup and archiving, and it’s a matter of time until it becomes a table stakes feature in primary storage,” he said. Reagan also said using Permabit’s deduplication leaves the door open for Xiotech to add compression as well, although the vendor has no concrete plans for that yet.
Xiotech is the second vendor to publicly announce plans to use Albireo, following NAS vendor BlueArc last month. Permabit CEO Tom Cook says more are coming.
“Until now, NetApp has had a strong advantage as the only vendor with [primary] deduplication,” Cook said. “We’re seeing a clear objective from all storage vendors to have these products in the market in 2011.”
NetApp has offered dedupe for primary data since 2007, but other vendors have been lining up this year to follow that path. Dell acquired primary reduction vendor Ocarina Networks and IBM bought compression vendor Storwize this year. EMC added block compression to its midrange Clariion storage systems, and Hewlett-Packard said it will extend its StoreOnce backup deduplication technology to primary data. Storage systems based on ZFS can also take advantage of the dedupe built into that file system.
Brocade has been the subject of acquisition rumors for about a year now, despite denials from its CEO Mike Klayko that it is for sale. No acquisition talk came up Wednesday during the vendor’s three-hour analyst day webcast, as Brocade executives tried persuading analysts and investors that the company is on its way to boosting its struggling Ethernet business while remaining a Fibre Channel networking powerhouse.
But that didn’t stop at least one analyst from playing matchmaker. Kaushik Roy of Wedbush Securities sees Brocade as a good fit for Dell. Dell’s rival Hewlett-Packard bought Ethernet networking vendor 3Com earlier this year and then outbid Dell for storage systems vendor 3PAR. There has been a lot of speculation that Dell would look for another target after failing to match HP’s final $2.35 billion offer for 3PAR.
“We believe that Brocade is an attractive acquisition candidate and its stock is cheap,” Roy wrote in a research note today. “Dell is following on the footsteps of HP and we think that acquiring Brocade would give Dell access to storage and data networking, important components of the data center.”
Brocade would give Dell something HP lacks — its own Fibre Channel networking products. Dell and HP both sell devices from Brocade and Cisco through OEM and reseller deals. HP was believed to be a suitor for Brocade last fall until it bought 3Com, but is unlikely to chase Brocade now just for its FC business.
NetApp and Oracle today dropped their lawsuits against each other, ending their three-year legal scuffle over patents related to ZFS.
NetApp issued a release saying both sides agreed to dismiss their suits, but kept terms of the agreement confidential.
“For more than a decade, Oracle and NetApp have shared a common vision focused on providing solutions that reduce IT cost and complexity for thousands of customers worldwide,” NetApp CEO Tom Georgens said in the release. “Moving forward, we will continue to collaborate with Oracle to deliver solutions that help our mutual customers gain greater flexibility and efficiency in their IT infrastructures.”
The lawsuits go back to before Georgens was NetApp’s CEO and before Oracle had anything to do with ZFS. The dispute actually began in 2006 when ZFS Sun accused NetApp of violating Sun patents. NetApp then sued Sun for patent infringement in Sept. 2007, and Sun counter-sued a month later. Oracle inherited the suits when it acquired Sun this year, with litigation still pending. Oracle and NetApp began working on an out-of-court settlement soon after the Oracle-Sun deal closed.
There was collateral damage, too. In May, Coraid pulled its EtherDrive Z-Series NAS after NetApp claimed the product infringed on its ZFS patents and threatened to sue. Coraid has not yet said if the settlement means it can resume selling the Z-Series.
EMC executives have been touting the low-end midrange storage system they intend to launch early next year, talking it up on the company’s last earnings call last month and at an investors’ conference this week.
And documents like this about a Celerra NX3e NAS and iSCSI system are making the rounds. The NX3e, according to documents, is “storage for IT generalists — not storage managers.” But EMC people say the NX3e and the new midrange system are not the same, although they may be distant cousins.
In a terse post today, EMC blogger Storagezilla asked himself the question of whether the NX3e is the system CFO David Goulden talked about at the CitiGlobal Technology Conference this week.
His answer: “No that isn’t it. See you in 2011.”
It turns out the NX3e isn’t new, it’s just been geographically limited, according to an EMC spokesman who responded to my query.
“The Celerra NX3e is an IP storage solution that was released in a limited fashion last year,” the spokesman wrote in an email. “It is a channel-only product that is available only in Sweden, Denmark, Norway and Finland for the SMB market. … The ‘e’ emphasizes entry level and the online ‘experience’ for our partners and end users, including ease of installation, configuration and use, and a new online portal for support.
“This is the first of ongoing efforts to address customer needs in this fast growing segment of the market and, as was previously reported, look for details of new offers in early 2011.”
At the CitiGlobal conference, Goulden said the new low-end midrange system would cost in the $10,000 to $75,000 range and would have many capabilities found in higher end Clariion or Celerra systems. But a lot of lower-end midrange admins would probably appreciate some of the features of the NX3e — especially if EMC makes good on its claims made in the NX3e literature, such as:
“No more storage jargon, like LUNs and RAID groups. No more cumbersome and confusing configuration processes.”
So, Dell’s latest offer for 3PAR turned out to be a last-chance hope to land a haymaker rather than an indication of Dell being in the chase for the long haul. About an hour after 3PAR revealed it received new offers from Dell and Hewlett-Packard, Dell threw in the towel. The vendor issued a statement saying it would not try to match HP’s latest bid of $2.35 billion.
“We took a measured approach throughout the process and have decided to end these discussions,”
Dell senior vice president of corporate strategy Dave Johnson said in the statement.
Dell is entitled to a $72 million break-up fee from 3PAR under terms of their Aug. 16 agreement, and HP will acquire 3PAR unless another company makes an unlikely bid.
HP’s winning bid of $33 per share means 3PAR’s stock price more than tripled from $9.65 since Dell’s first offer less than three weeks ago.
Dell’s latest offer of $32 per share was revealed today by 3PAR, which determined HP’s counter was a superior proposal.
Now there is speculation that Dell will look for another storage acquisition instead. Shares of storage systems vendor Compellent, backup software vendor CommVault, and switch maker Brocade all rose today as shareholders anticipate a buyout.
Now it looks like the battle for 3PAR will turn into an old-fashioned 15-round bout between Hewlett-Packard and Dell. Neither 3PAR suitor backed down today, as they each made their fourth bid for 3PAR. At the end of the latest bidding round, HP’s had the highest offer of $33 per share or $2.35 billion. Still, Dell kept its right to match any bid for 3PAR.
3PAR today said that after it told Dell of its plans to terminate its merger agreement to accept HP’s previous offer of $30 or $2 billion, Dell raised its offer from $27 to $32 per share with a termination fee of $92 million. HP then raised its bid to $33 per share.
Dell’s offer was good enough to at least prevent 3PAR from terminating the Aug. 16 agreement between the two, and 3PAR’s board must continue to recommend its shareholders accept Dell’s latest offer. However, 3PAR immediately deemed HP’s $2.4 billion off a “superior proposal,” and gave Dell another three business days to respond.
There was a twist to Dell’s latest offer. It proposed a multi-year reseller deal with 3PAR that any acquirer must honor. 3PAR said the offer also included price fixing and other terms that its board determined unacceptable. 3PAR did not give details on the “other terms.”
3PAR’s stock price has more than tripled from $9.65 since Dell’s first offer on less than three weeks ago.